Performance Appraisal

Index
About Performance appraisal
Definition Meaning Objectives

Process of Performance Appraisal Methods / Techniques of Performance Appraisal

Traditional Modern

Issues in Performance Appraisal Advantages of Performance Appraisal Disadvantages of Performance Appraisal

Definitions
According to Newstrom, It is the process of evaluating

the performance of employees, sharing that information with them and searching for ways to improve their performance.

Meaning
Performance appraisal is the step where the management finds out how effective it has been at

hiring and placing employees .

A Performance appraisal is a process of

evaluating an employees performance of a job in terms of its requirements.

Purpose

Empowerment

Relationship

Flexibility Optimal Performance

Recognition and Rewards Morale

Objectives of Performance Appraisal

According to:
Employee concrete and tangible particulars about their work assessment of performance Organization measuring the efficiency maintaining organizational control.

Aims at:
Personal development work satisfaction involvement in the organization.

mutual goals of the employees & the organization. growth & development increase harmony & enhance effectiveness

Process
Setting performance standards

Taking corrective standards

Communicating standards

Discussing results

Measuring standards

Comparing standards
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Methods of Performance Appraisal

Traditional Methods
1. Paired comparison 2. Graphic Rating scales 3. Forced choice Description method 4. Forced Distribution Method 5. Checks lists 6. 7. 8. 9. Free essay method Critical Incidents Group Appraisal Field Review Method

Modern Methods
1. Assessment Center 2. Appraisal by Results or Management by Objectives

3. Human Asset
Accounting 4. Behaviorally Anchored Rating scales

10.Confidential Report 11.Ranking

Ranking employees by paired comparison Method

For the Trait Quality of work Person rated
As compared to A B C

For the Trait Creativity

Person rated
As compared to A + A + B + C + +

+ +

+ +

++
--

+ +

+ -

+ -

+ +

Paired-comparison Approach
Paired-comparison Approach: A performance appraisal that measures the relative performance of employees in a group.
This is a method of performance evaluation that results in a rank ordering of employees to come up with a best employee. This type of approach measures the relative performance of employees in a group.

 Employees are ranked by comparing the first two employees on the list.
The supervisor places a check mark next to the name of the employee whose performance is better. The process is repeated, comparing the first employees performance with that of the other employees. Then the supervisor compares the second employee on the list with all the others, and so on until each pair of employees has been compared. The employee with the most check marks is considered the most valuable.

 The paired-comparison approach is appropriate when the supervisor needs to find one outstanding employee in a group for a promotion or special assignment.
The fact that paired comparison makes some employees look good at the expense of others makes this technique less useful as a method of providing feedback to individual employees.

Graphic or Linear Rating Scales

Attitude
0 5 10 15 20

No interest In work: consistent complainer

Careless: In-different Instructions

Interested in work: Accepts opinions & advice of others

10
Takes decisions promptly

Enthusiasti c about job & fellowworkers

Enthusiastic opinions & advice sought by others

Decisiveness
0
Slow to take decisions

5
Take decisions after careful consideration

15
Take decisions in consultation with others whose views he values

20
Take decisions without consultation

Forced choice method

Criteria 1.Regularity on the job Most Rating Least

Always regular Inform in advance for delay Never regular Remain absent Neither regular nor irregular

 Forced-choice Approach: A performance appraisal that presents the appraiser with sets of statements describing employee behavior; the appraiser must choose which statement is most characteristic of the employee and which is least characteristic.

Forced-Choice Approach

 This type of appraisal form gives the supervisor sets of statements describing employee behavior.
For each set of statements, the supervisor must select the one that is most and the one that is least characteristic of the employee.
These questionnaires prevent the supervisor from saying only positive things about employees. It is used when an organization finds that supervisors have been rating an unbelievably high proportion of employees as above average.

Forced distribution method

No. of employees

10% 20%
poor

40%

20%

10%
Excellent

Below average good average Force distribution curve

Specimen of Staff Assessment Form [Descriptive Essay Type]

Staff Appraisal
Name . . . . . . . Job Title . . . . . . . Department . . . . . . . . . . . . Date of Review . . . . . . . Age . . . . . .. . Years in present job Section I Appraisal Of Performance Note to Appraiser 1. Appraisal must cover the period of the preceding 12 months 2. Consideration to every function & responsibility of the job 3. An objective factual assessment of an employees improvement or deterioration Section II Promotability & Potential Promotability 1. Promotion now 2. Within 2 years 3. Within 5 years 4. Unlikely to qualify for promotion Section III Career Development Section IV Section V Notes on Interview with employee Comments on & Endorsement by Reviewing Authority

Critical Incident method

Ex: A fire, sudden breakdown, accident

Workers A B C D

Reaction Informed the supervisor immediately Become anxious on loss of output Tried to repair the machine Complained for poor maintenance

scale 5 4 3 2

Was happy to forced test

 Critical-incident Appraisal: A performance appraisal in which the supervisor keeps a record of incidents that show positive and negative ways the employee has acted; the supervisor uses this record to assess the employees performance. Critical-Incident Appraisal

 To conduct a critical-incident appraisal, the supervisor keeps a written record of incidents that show positive and negative ways in which the employee has acted.
The record should include dates, people involved, actions taken, and any other details that are relevant. At the time of the appraisal, the supervisor reviews the record to reach an overall evaluation of the employees behavior. During the appraisal interview, the employee has a chance to respond to each of the incidents recorded.

 The advantage of this method is that it focuses on actual behaviors.

However, the recordkeeping is time-consuming, and since negative behaviors are more likely to be recorded than positive behaviors, it can be overly harsh.

 Work Standards Approach: A performance appraisal in which the appraiser compares the employees performance to objective measures of what an employee should do.
This type of appraisal requires the supervisor to establish objective measures of performance.
A typical work standard would be the quantity produced by an assembly-line worker. The supervisor then compares the employees actual performance with the standards. This approach works best with production workers.

Field review method

Performance Dimension Leadership Communication Interpersonal skills Decision making subordinate ^ ^ ^ ^ ^ ^ ^ ^ peers superior customer ^

Technical skills
Motivation

^
^

^
^

^
^

Group appraisal method

MBO Process
Set organizational goals Defining performance target Performance review feedback

 In organizations where MBO is used to set goals and objectives for employees, the supervisor will use this approach for performance appraisal also.
The appraisal is based on whether or not the employee has met his or her objectives. The advantage is that employees know what to expect. The supervisor focuses on results rather than more subjective criteria.

Management by Objectives (MBO)

Performance

Behavioral Anchored Rating Scales

Points Behavior

Extremely good

Can expect trainee to make valuable suggestions for increased sales and to have positive relationships with customers all over the country. Can expect to initiate creative ideas for improved sales. Can expect to keep in touch with the customers throughout the year. Can manage, with difficulty, to deliver the goods in time. Can expect to unload the trucks when asked by the supervisor.

Good Above average Average Below average

6 5 4 3

Poor

Can expect to inform only a part of the customers.

Can expect to take extended coffee breaks & roam around purposelessly.

Extremely poor 1

360 degree performance appraisal

Examples of 360 degree performance appraisal method

These companies are using 360 Degree Performance Appraisal Method Wipro Infosys Reliance Industries Maruti Udyog HCL Technologies Wyeth Consumer Health (WCH)

Issues in appraisal system

Formal and informal What methods?
Whose performance?

When to evaluate?

Appraisal Design

Who are the raters?

What to evaluate?

What problems?

How to solve?

Advantages
provide a record of performance over a period of time.

Can be motivational with the support of a good reward and compensation

provide an opportunity for a manager to meet & discuss performance

Provide an opportunity for an employee to discuss issues and to clarify expectations

Provide the employee with feedback about their performance

Disadvantages
If not done appropriately, can be a negative experience. very time consuming, especially for a manager subject to rater errors & biases. If not done right can be a complete waste of time.

Can be stressful for all involved